cedar mountain exploration corporate presentation (feb 2012)
DESCRIPTION
TRANSCRIPT
Graphite Creek Project
Alaska, USA
February 2012
Management & Board of Directors
Charles Chebry, B.Sc., CMA President, CEO, & Director
Dean Besserer, B.Sc., P.Geol. VP Exploration
Anthony Huston, B.Comm. VP Business Development & Director
Dale Hansen, CMA CFO
John Williamson, B.Sc. Geology, P.Geol.
Director
Sean Mager, B.Comm. Director
Peter Kleespies, M.Sc., P. Geol. Director
John Robins, B.Sc., P.Geo. Advisor
Dr. Travis Hudson, Ph. D. Chief Geologist
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Cedar Mountain Exploration’s management and directors have collectively raised over $250 million for exploration in the past 10 years with over 25 years of experience in the industry.
Share Structure
as of October 20, 2011
SYMBOL: EXCHANGE CED: TSX–V
SHARES ISSUED 53.3 M
FULLY DILUTED 82.1 M
WORKING CAPITAL (as of September 30, 2011) $0.6 M
OPTIONS 5.0 M
WARRANTS 23.9 M
5.5M @ $ 0.30 Expires 7/9/12 / 17.4M @ $ 0.35 Expires 3/8/13*
Insider Ownership ~ 22% of shares issued *Exercise price increases to $0.45 after 3/8/12 to expiry
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Graphite Production Large-flake, high-purity graphite has the most diverse application in the market today
China produces over 70% of the world’s graphite or about 800,000 tons per year
– Mainly low-carbon, low-value powder or small flake
– Declining production/exports and increasing costs
– Emphasis on value-added processing
– Export taxes, VAT, and export licenses imposed
The industrial world is recognizing the importance of reliable and stable graphite supply
– Potential shift in major production locations as China’s resource continues to deplete
– India and Brazil follow China in the next largest countries of production
– Listed as a “supply critical mineral” in USA and European Union and as a “strategic mineral”
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Graphite Consumption
Global consumption of natural graphite has increased from ~600,000 tons in 2000 to 1.1 M tons in 2011
– Global graphite reserves are thought to be around 71 million tons
– Flake graphite production is approximately 400,000 tons per year
Demand from BRIC* and emerging economies has been growing at about 5% per annum between 2000 – 2010, contributing to the rising price of graphite today
“Large-scale fuel-cell applications are being developed that could consume as much graphite as all other uses combined” – USGS, 2009
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*BRIC – Brazil, Russia, India, China
Graphite Prices
Prices have almost tripled since 2005 due to:
– Industrialization of BRIC
– Strong demand from traditional steel and automotive markets
– Increasing demand as China’s production and exports decline
US$ per tonne (94 – 97% Carbon):
– Large Flake - $2,500 – 3,000 (+80 mesh) – Medium Flake - $2,200 – 2,500 (+100-80 mesh) – Fine Flake - $2,000 – 2,400 (-100 mesh)
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Price Chart
Source: Industrial Minerals Magazine
Emerging Applications
Some of the uses that are driving demand for graphite:
Pebble Bed Nuclear Reactor Advantages – No meltdown by design
– Lower capital and operating costs
– More efficient with the use of heat and fuel
Lithium-Ion Batteries Advantages – Smaller, lighter and more powerful than traditional batteries
– Li-Ion battery demand for graphite in the next 5 to 7 years will consume more graphite than is produced in total today
– Used in all types of electric vehicles with 10 - 20x more graphite than lithium used
– Only flake graphite is conducive to making Li-Ion batteries
Fuel Cell Advantages – 80kg of graphite is used in the average fuel cell vehicle
– Fortune 500 companies are targeting fuel cell markets for non-transportation uses
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Future Auto-Sector Predictions
“Combined global sales of hybrid-electric vehicles (HEVs), plug-in hybrid-electric vehicles (PHEVs) and battery-electric vehicles (BEVs) will total 5.2 million units in 2020, or some 7.3% of the 70.9 million passenger vehicles forecasted to be sold worldwide by that year” (estimate only)
“Global HEV, PHEV and BEV sales in 2010 are forecasted to total 954,500 vehicles, or 2.2% of the 44.7 million vehicles projected to be sold through the end of 2010.” - J.D. Power Global Forecasting, 2010
“As battery manufacturers grow with the burgeoning automotive lithium battery industry, these manufacturers will need a stable supply of raw materials. Increasingly, they are looking for graphite outside of China. Today, there is annual demand for roughly 1.1 million tonnes of natural graphite … but 960,000 tonnes of that capacity comes from China. This leaves customers largely dependent on China as a source of supply.” – Byron Capital Markets, 2012
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Future Demand from Auto-Sector
1% 5% 10% 15% 20%
5% 286 637 1,082 1,520 1,965
10% 479 836 1,274* 1,719 2,163
15% 678 1,029 1,473 1,918 2,356
20% 877 1,228 1,672 2,111 2,555
25% 1,070 1,310 1,865 2,310 2,748
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(000 tonnes)
Flake Graphite Requirements For Hybrid Electric Vehicles / Electric Vehicles Market Penetration by 2020
Electric Vehicles Market Penetration
Hybrid Electric Vehicles Market
Penetration
*10% increase in usage for EV & HEV will triple current flake-graphite demand by 2020 Source: Canaccord Research
Alaska, USA
Pro-mining jurisdiction
Largely unexplored with high potential for discovery
Mineral production accounted for 28% of Alaska’s total exports (2010)
Infrastructure is already in place and readily accessible
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Graphite Creek Project
Located on the Seward Peninsula
Privately owned property
3 km from intertidal waters at Windy Cove and 65 km north of Nome
Located 20 to 30 km away from road systems and 3 km from airstrip
Large-flake, high-purity graphite deposit exposed at surface that is conducive to an open-pit mining configuration
7,680 acre property with 48 Federal mining claims in the land package
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Graphite Creek Deposit
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Strike Length: 5 kilometres
Thickness: 100 metres
Exposed Dip Length: 100 to 200 metres
Potential for over 200 million tonnes of graphite-bearing rocks in the priority exploration target area
Geology
Primarily hosted by a distinctive garnet biotite quartz schist interval that contains coarse, crystalline flake graphite in disseminations and high-grade graphite segregations and lenses
Graphite-rich with grades ranging from a few percent in biotite quartz schist to 60% in high-grade lenses
In a host schist interval that is continuous over 5 km of strike length, commonly has a thickness of 100 metres, and is exposed over dip lengths of 100 to 200 metres
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Graphite Creek Analysis
Size, mesh Weight
Graphite in
Sample Flake Size
Distribution, % g % g %
HIGH-GRADE GRAPHITE
Plus 10 89.5 9.1 45.1 50.4 8.1
10 by 40 566.3 57.5 316.5 55.9 56.7
40 by 80 177.3 18.0 109.1 61.5 19.5
80 by 100 31.5 3.2 20.3 64.3 3.6
100 by 200 43.7 4.4 27.0 61.8 4.8
Minus 200 76.5 7.8 40.7 53.2 7.3
Total Calculated Head 984.8 100.0 558.7 56.7 100.0
Assayed Head 56.9
Total Large Flake Percentage (+80) 84.3 DISSEMINATED GRAPHITE
Plus 10 11.8 1.3 1.1 9.5 1.5
10 by 40 630.0 71.1 47.3 7.5 64.3
40 by 80 68.6 7.7 7.9 11.5 10.7
80 by 100 21.4 2.4 2.2 10.4 3.0
100 by 200 63.2 7.1 7.0 11 9.5
Minus 200 90.9 10.3 8.1 8.9 11.0
Total Calculated Head 886.0 100.0 73.5 8.3 100.0
Assayed Head 8.2
Total Large Flake Percentage (+80) 76.5 MIXED HIGH-GRADE AND DISSEMINATED
Plus 10 128.6 11.8 18.1 14.1 10.5
10 by 40 719.7 66.0 108.0 15 62.8
40 by 80 181.2 16.6 35.0 19.3 20.3
80 by 100 11.5 1.1 2.1 17.9 1.2
100 by 200 20.4 1.9 3.5 17.4 2.1
Minus 200 29.7 2.7 5.2 17.6 3.0
Total Calculated Head 1,091.1 100.0 171.9 15.7 100.0
Assayed Head 14.5
Total Large Flake Percentage (+80) 93.6
Photomicrograph of Crystalline Flake Graphite Concentrate
Graphite Sample Laboratory Data
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Scalable deposit with many beneficial attributes
Graphite Projects
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Market Capital as of February 1, 2012
Cedar Mountain Exploration: $10M Graphite Creek –
(Potential for +200 Mt @ 5.0 – 10.0% Cg)
Strike Gold: $8M Simon Lake, Deep Bay East –
(no NI 43-101 compliant resource)
Mega Graphite: Privately Owned Treelined –
(no NI 43-101 compliant resource)
Ontario Graphite: Privately Owned Kearney Mine –
(48 Mt @ 2.5% Cg)
Northern Graphite: $73M Bissett Creek –
(54 Mt @ 1.9% Cg)
Focus Metals: $68M Lac Knife –
(8 Mt @ 16.7% Cg)
Greenlight Resources: $3M Golden Grove –
(no NI 43-101 compliant resource)
Mega Graphite: Privately Owned Bedford, Burgess –
(no NI 43-101 compliant resource)
Standard Graphite: $6M Carheil Lake, Sandy(&NE) Lake –
(no NI 43-101 compliant resource) Standard Graphite: $6M
River – (no NI 43-101 compliant resource)
Standard Graphite: $6M Black Donald, Little Bryan, B. Lyall (ON) Kiamika, Preston, Notre Dame (QC)–
(no NI 43-101 compliant resource)
The Deal
Option to earn a 100% interest in the Graphite Creek Project over a three year period through exploration work totaling $1,525,000 and cash payments of $25,000 on signing, March 1, 2012 - $50,000, March 1, 2013 - $100,000 and March 1, 2014 - $250,000
Upon completion of the work and cash payment provisions of the option agreement the project will be governed by a 20 year lease with automatic renewal provisions
The lease agreement allows for a 5% production royalty which can be reduced to 3% by cash payment of $2,000,000 for each one percent purchased
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Exploration & Resource Delineation
Project Objectives: Q2, Q3 2012
– Geologic Mapping
– Surface Sampling
– Conductivity survey
– Diamond drilling
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Objective to confirm a NI 43-101 compliant resource next year
Key Investment Drivers
Place: favourable mining district in Alaska situated in ideal location
Project: large-flake, high-purity graphite deposit exposed at surface
People: proven technical expertise combined with strong management capable of executing a given plan
Plan: Mount an aggressive exploration campaign, commencing with further surface mapping, sampling, and diamond drilling in the summer of 2012
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Contact Information
Charles Chebry
CEO, President
Direct 403.283.0001
Anthony Huston
VP Business Development, Director
Direct 604.697.2862
Jennifer Paterson
Investor Relations Manager
Direct 604.697.2860
Corporate Head Office
220, 9797-45th Avenue
Edmonton, AB
T6E 5V8
Vancouver Office
1280, 885 West Georgia Street
Vancouver, BC
V6C 3E8
www.cedarmountainexp.com
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Forward Looking Statement
Certain information regarding the Company contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company’s control, and that future events and results may vary substantially from what the Company currently foresees. Discussion of the various factors that may affect future results is contained in the Company’s Annual Report which is available at www.sedar.com. The Company’s forward-looking statements are expressly qualified in their entirety by this cautionary statement.
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